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First Business

Market Outlook News/Business. Angie Miles. (2013) Professionals shed insight on the economy and the stock market. New. (CC) (Stereo)

NETWORK

DURATION
00:30:00

RATING
G

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Channel 19 (153 MHz)

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
704

PIXEL HEIGHT
480

TOPIC FREQUENCY

Mastercard 5, U.s. 5, S&p 5, Europe 3, Germany 3, Dell 3, Afghanistan 2, China 2, Hugh Totten 2, Apple 2, Tbi 2, Us 2, Morgan Stanley 1, Mexico 1, Mary Kay 1, Sebastian 1, Arthur Koff 1, Bill Moller 1, David 1, Martha Stewart 1,
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  KICU    First Business    Market Outlook  News/Business. Angie Miles.  (2013)  
   Professionals shed insight on the economy and the stock market....  

    February 20, 2013
    4:00 - 4:30am PST  

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white collar watchdogs. how the justice department plans to put robbers from wall street behind bars. in today's cover story, with the sequester cuts to begin just 10 days from now, what's happening behind the scenes on capitol hill. and.... to the moon! hear one trader's ambitious prediction for the s&p 500. plus, traffic ticket tips: how to keep your insurance rates from surging. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's wednesday, february 20th. i'm angela miles. in today's first look: the short trading week is off to a postive start. the dow made a push above 14,000 and the s&p 500, which is not at a 5 year
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high. gold had a major sell-off of 32 dollars as oil slipped slightly. in earnings after the close, dell beat the street despite a drop in profits and sales. and herbalife profits, revenues and the company's full-year forecast are all up. perhaps it's all the news coverage giving herbalife a lift. and macy's goes to to court today hoping to persuade a judge to permanently block martha stewart's living omnimedia from its deal with jcp. here to kick off our trading day on this wednesday, mark sebastian of option pit mentoring. i would love to get your reaction to the earnings coming out from dell after the close last night mark. > > yeah, kind of interesting. we daw dell tick up a little bit. i think this lends further credence that maybe that deal price is going to go higher.
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$13.65, maybe i think we seek something closer to $14 now that these earnings were not bad. > google crossed $800. is this stock inexpensive or expensive? > > you know, i think it is a little of both. it is certainly a momentum stock right now. i think a lot of money has left apple and moved into google, so don't be surprised if we see who google threaten that $850 level before we see any type of resistance. > what will the situation in germany mean to traders in the united states? confidence is up there, the dax has been doing great. what do you think about germany? > > you know, europe good is good for the u.s. that has been kind of the big laggard on, i think, the global economy. so if europe gets its act together, i think the s&ps go to the moon. > what would you buy right now then, just an s&p index? > > yeah, i would be looking at spiders or an s&p future, or
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call options on the s&p futures with the vix so low. > you are definitely a bull in this market. > > absolutely. > would you buy any stocks related to germany? > > you know, maybe. i think i would still like to stick to core u.s., because u.s. continues to lead the overall world. > mark, great to have you on the show. we will see you in a bit. > > thanks for having me. president obama turns up the heat on members of congress to avoid automatic cuts to federal funding that could start by the end of next week. the deadline was created to help settle the debt ceiling crisis in 2011. but as our cover story explains, so far, sequestration has become another term for a stalemate. standing among first-responders who'd face cutbacks statrting march first, president obama called sequestration "a meat cleaver approach." "these cuts are not smart, they are not fair, they will hurt our economy, they will add hundreds of thousand of americans to the unemployment rolls. this is not an abstraction; people will lose their jobs." automatic cuts in federal funding were meant to scare congress into compromise. at
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risk, fema grants to pay firefighters during disasters, loan guarantees to small businesses, fewer food inspectors, border patrols, and air traffic controllers, to name a few. "i've never taken the sequester seriously. it's a gimmick to reach agreement." economics professor lawrence officer thinks a deal is likely. "i'm not going to lose sleep over it. congress will rescue it in the end, if not before." house speaker john boehner criticised the president's less-than-two-week countdown, saying: "just last month, the president got his higher taxes on the wealthy, and he's already back for more. the american people understand that the revenue debate is now closed." "so now, republicans in congress face a simple choice. are they willing to compromise to protect vital investments in education and healthcare and national security and with all the jobs that depend on them, or would they rather put hundreds of thousands of jobs and our entire economy at risk just to protect a few special interest
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tax loopholes that benefit only the wealthiest individuals and corporations? that's the choice." the sequester - $1.2 trillion in deficit reductions - was supposed to be an incentive for a supercommittee of lawmakers to come up with a different deficit reduction plan. with time running out, cuts would affect the pentagon and other departments, although some would argue that it coincides with a military drawdown in afghanistan. congress is investigating a $100-million shortfall in the department of labor's job corps program. that program helps low-income youth with job training and placement, and was founded by president lyndon johnson. the program is currently suspending enrollment for at least the next five months. the department of labor says it attempted to reduce operating costs, but the savings were not enough. the department tells us: 'job corps is conducting an exhaustive review of its current operating costs in order to make changes to ensure that program costs are sustainable in
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the future." a massive strike of india's workforce is expected to begin today. trade unions are organizing the strike, which includes millions of workers from the country's banking and manufacturing sectors, among others. workers are calling for a higher minimum wage and better implementation of the country's labor laws. it's expected the strikes will ripple through the indian economy. gdp could take a hit of about 200 billion rupees, which translates to 3.7 billion u.s. dollars. car sales are in a slump in europe. europeans in several nations are hitting the brakes on buying cars as austrity measures translate into high unemployment and recession. new car registrations fell to 8.7% in january, the lowest level since 1990. one billion dollars. that's the fine offshore drilling company trans ocean will pay in civil penalties following the 2010 gulf of mexico oil spill. bp
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hired trans ocean prior to the 2010 deepwater horizon explosion. the company pled guilty for violating the clean water act and will have two years to pay the billion-dollar fine. it's a story reminiscent of a hollywood screenplay: millions of dollars' worth of diamonds stolen in a matter of minutes. but it's real. thieves dressed as police cut a hole in a brussels airport security fence, drove to a swiss airlines jet that was transporting the gems, cut a hole in the plane, removed the diamonds and then drove off. it all took less than eleven minutes and was done in broad daylight. reports put the value of the diamonds between 50 and 350 million dollars. the beechcraft corporation is flying high again. the company is making its formal exit from bankruptcy with less debt and without its unprofitbale business jet division. beechcraft corp will build turboprop jets as well as
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special mission and light- attack planes. the u.s. aircraft manufacturer has been around for 80 years. meanwhile, another iconic american brand is landing back in bankruptcy court. rda holding, which owns reader's digest, has filed for chapter 11 bankruptcy for the second time in 3 years. rda holding claims to have reached a financiing agreement and expects to emerge from bankruptcy in six months. prices are going down for your morning jolt. j.m. smucker, a power-player in the coffee roasting business, is cutting prices on folger's and dunkin' donuts packaged coffee. the change is due to a continuing drip in arabica futures, which have dropped more than 50% since may 2011. a new study offers insights into just how traffic tickets drive up insurance costs. according to research by insurancequotes.com, insurance rates kicked up for 31% of drivers who received a traffic ticket in the past 5 years.
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younger drivers are the most likely to pay higher insurance costs because of a ticket, and the average increase was around $100. but there are ways to avoid paying more. "a person who gets a ticket, they have their auto insurance, and let's say their renter's policy with the same carrier, they are more likely to get a break on a rate going up than someone who only has their auto insurance wtih that carrier." other strategies, laura adams of insurance quotes.com says, include attending traffic school to wipe off the points, avoiding getting a second ticket - that's what tends to trigger the rise in insurance - and consulting an attorney if you have several tickets. office depot and officemax are reportedly in advanced merger talks. both of the office supplies retailers have been hit by declining revenue at retail stores. if the merger does go through, combined revenue would still be behind the largest such supplier, staples inc. it's a deal that appeals to wall
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street. stock for both companies rallied yesterday. instead of going to the doctor, you could go to the kiosk. the burgeoning healthcare industry is betting millions that you will. self-serve kiosks now offer things like blood pressure and eyesight checks and even video consultations with a doctor. the trend is poised to grow significantly given new healthcare laws. because of major corporate backing, critics believe the kiosks could be used to sell certain products. the list of companies hit by hackers is growing at a rapid pace. reuters reports hackers infected employee macintosh computers at apple. it's considered the largest cyber- attack ever against apple computers. the malware appeared on a software site for developers. a similar situation happened at facebook - some believe by the same hackers. cyber-scammers also commandeered twitter pages of jeep and burger king. apple is said to be making a
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call that could boost business in china. according to a morgan stanley analyst, as early as this summer, apple could launch an iphone mini that sells for $330. if the low-cost iphone entices consumers, it could give apple a 20% larger slice of the smartphone market in china. coming soon, a battle over movie trailers. traditionally, those short clips that entice moviegoers to come back to see the advertised film were tacked onto feature films by the studios. now, the l.a. times says some studios are being asked to pay as much as $100,000 to play just one trailer. still to come, the government wants to lock up criminal masterminds on wall street. will the plan succeed? that's later. but first, if you've considered one of those work-from-home ads, stay tuned. we'll hear about some common traps next, with bill moller.
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a lot of retirees stay active and earn an income by starting their own business. sometimes companies pitch retirees on a business idea. sometimes there's a lot of pressure in that pitch. so, how do you know what's legitimate and what makes sense? let's talkg with arthur koff. he is the founder of the business retiredbrains.com. art, how big is this? how many retirees are actually starting their own businesses? > > huge numbers. many of them are not able to find work, and they find that if they can start their own business
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without having to invest very much money, it is a really good way to get started. > investing is the key there, because there are a lot of franchise businesses they could start, but that requires a lot of up-front cost. > > most people are not as interested in franchises because of the cost, yes. > how about off-the-shelf ideas? ready-made ideas? what, typically, are the kinds of businesses that retirees would do? > > well, i can actually give you a list, i brought a list. the kinds of things that people are going into, almost in this order, are: they're doing telemarketing; they are doing direct selling for companies like mary kay and avon; they're writing or editing if they have a background along that line; they become virtual agents; they do medical transcription; some people become tutors. there is a whole list of people that can do those kinds of things. > and sometimes they are entrepreneurs and start a whole new business category too. now if there are receiving pitches to start a business, how do you know if those are legitimate businesses? > > you can check with your
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local secretary of state, you can check with the better business bureau. i suggest people go to google maps and check to see where the location of that business is. is it where they say it is? but the most important thing would be to talk to somebody local, who you can meet face-to-face, who actually has been in that business. > what kinds of income can you typically expect to make in your own business? > > we find that the second year, people make between $25,000 and $50,000 a year doing that. first year, it depends on many factors. > so you have to find something that you enjoy doing. > > if you don't enjoy it by the time you get to be a retiree, you really should look elsewhere. > your site, retiredbrains.com, you're not making any money on that. it is a pretty good resource for people to turn to to get ideas, to learn what the process is to start a business. > > we have a great deal of content. many, many pages. if they go to retiredbrains.com and go to either "start your own business" or "work from home," there are pages and pages and pages of information on how to go about getting a good job. > arthur koff from
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retiredbrains.com. thank you so much. > > and thank you. still ahead, why prosecutors are saying now is the time to put wall street criminals behind bars. that and more, coming up next.
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it's not so easy to catch a criminal on wall street. hugh totten of the valorem law group joins us via skype this morning. good morning to you, hugh, and why is it so tough to prosecute wall street? > > these are very complex
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crimes. but i think the tougher thing that causes the government to back away is, there are so many elements of the government at work that are in opposition to each other. so if the justice department wanted to prosecute somebody right now, they would have to deal with, for example, the financial crimes inquiry comission report that came out a couple years ago and said the entire mortgage crisis and the economic crisis that we have had was caused by the lack of regulation, not because anybody did anything bad. they also said that there was no problem with the rating agencies and now the department of justice is trying to sue one of the rating agencies. so you have all these different people involved in the mix going in different directions. > the justice department has a new approach, and that is to actually push for guilty pleas. this has not been the norm, there have simply been some fines there. will this work? > > i think it is unlikely. the reason they are doing this is to actually impose some kind of punishment. but the guilty plea only goes to the subsidiaries
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of the companies involved, not to the companies themselves, because a fraud or guilty plea would disqualify them from getting licenses and doing business. so, the alternative is to put all these companies out of business. > lawyers are said to be changing the way they defend the big banks. what do you think that will entail? what would you do if you were on that side in the courtroom? > > a lot of the lawyers are talking about firing people that have actually been the bad actors here. the problem with that is, now you're going to make that person an antagonistic witness? and if you think they are going to help you at trial, you'd better think again. > hugh totten of the valorem law group. good to have you on this morning. thank you for your insights. > > thanks for having me back. don't go anywhere. still ahead, a look at two stocks that may be set to "charge" forward. chart talk is next.
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ehicle. when i came here, i... i couldn't move. [male announce david was broadsided on the highway. they weren't very hopeful at the time that he would survive at all.. [male announce an ied wounded mike in afghanistan. i don't remember all of the blast... was over 500 pounds of explosives. [male announce their physical injuries have healed. the traumatic brain injuries - tbis - haven't. the way i describe it is you're just afraid. am i going to start forgetting things? [male announce tbi is as serious as any battlefield injury.
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you're just not the guy you used to be. [male announce thankfully va has made important advancements in tbi seeing it, treating it, understanding it. and they're here to help veterans affected by it. i can see that what we're doing here at the polytrauma unit is to move from survivability to thrive-ability. [male announce if you think you or a veteran you know has sustained a brain injury, get screened. let's say good morning once
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again to mark sebastian of option pit mentoring. thanks for doing double duty on the show today. you have a couple of terrific stocks that you're watching: visa and mastercard. let's start with visa. what do you see in the chart that you like right now? > > well, while the whole market has been rallying, and we have really been seeing the financials lead this market, we have seen a little money come out of the payment processors, and i don't think it is going to be out for very long. visa ran into some resistance at that $160 level. i think it is going to blow right through it. > what about mastercard? > > kind of the same thing. mastercard and visa really move together. they have both been kind of in a rough patch here, and i don't think that can last, especially if the consumer is a little more durable than i think a lot of people are betting. i think they are both prime for a breakout. if we can see visa break that $160 level, i think it could be straight to the moon for both stocks. > why do you think traders have been selling these stocks, or, as you mentioned, lagging the market right now? why do you think that is happening? > > they were big leaders, and
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so people rolled out of their winners into some other financials. and now that these have lagged for long enough, i think you can see some money roll out of your goldmans and morgan stanleys and back into some of the payment processors. > you are a big options player, so what do you see in the options market? what are the options telling you about visa and mastercard? > > it is interesting, both visa and mastercard are at the lowest implied volatilities in about two years. they are screamingly low. rather than going long the stock, i would be looking to go long calls on both. in particular i am looking in visa at the $160 calls in april for about $3.15 to $3.20. i think that is a phenomenal price for those options - about 2% of the cost of the stock, and you get 60 days for it to rally. to me, i look at that trade as a really statistically favorable trade for that duration. > let's break this down a little bit more for people who don't trade options. basically, you are saying when the vol is low, there is less risk to the stock, correct? > > right. the vol's low, there is less risk to the stock, and,
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you can buy options for cheap. so we can actually get those visa $160 calls. and really, it is low, low, low price levels. if you equate options to insurance, it is like visa is a really good driver with a couple of kids and a minivan, where in the past maybe it has been a hoodlum with a sports car. > ok. so in other words, you think that stock is going to rise above $160. > > absolutely. my break-even is about $163, and i think it has a good shot at doubling my money on those calls. > thank you mark. > > thank you. > have a good day. finally, you might want to just leave your tv turned to this channel so you don't miss tomorrow's show. coming up on thursday, our special edition of movies and money as we "glam up" with our oscar picks! that's it for now. from all of us at first business, have a great day!